Issue 21 - Caravan parks and camping grounds

Operators of caravan parks and camping grounds usually offer serviced and unserviced sites to accommodate their guests' caravans, campervans, manufactured homes, relocatable homes, mobile homes and tents. They may also rent on-site accommodation in caravans, cabins, manufactured homes, relocatable homes, mobile homes or demountables to guests who prefer to have their accommodation provided.

All of these types of supplies are supplies of commercial residential premises. They may be for either short-term or long-term stays.

Issue

What is the GST treatment of caravan park and camping ground accommodation?

Decision

Permanently leased caravan sites by customers whose vans are kept on site

As discussed in issue 20 above, the long-term accommodation rules in Division 87 apply to the provision of commercial accommodation, including accommodation provided in caravan parks, for long-term stays. Long-term stays for the purposes of the GST Act are those that are for 28 days or more.

To work out the number of days in the period for which an individual is provided with commercial accommodation:

count the day on which he or she is first provided with the commercial accommodation

disregard the day on which he or she ceases to be provided with commercial accommodation.

In the case of long-term stays you have a choice on how to apply the GST. Under Division 87 of the GST Act, you have the option of using a concessional treatment to work out the GST on your supplies of long-term accommodation. Alternatively you can choose not to use the concessional treatment in Division 87, in which case your supplies of long-term accommodation will be input taxed under Division 40*.

Predominantly long-term accommodation for the purposes of the GST Act applies where 70% or more of your bookings of long-term sites for individuals are made for a continuous period of 28 days or more.

If your park or camping ground is predominantly for long-term accommodation you can choose to:

charge GST for your supply of long-term accommodation on a reduced value (that is, 50% of the GST-inclusive price of the accommodation) for the guests' entire stay, or

treat all of these supplies as input taxed in the same way as residential rent*.

If less than 70% of your bookings of long-term sites for individuals are made for a continuous period of 28 days or more you do not provide predominantly long-term accommodation.

If your park or camping ground is not predominantly for long-term accommodation you can choose to:

charge GST for your supply of long-term accommodation on:

the full value of the supply for the first 27 days of continuous accommodation of long-term guests, plus

a reduced value (that is, 50% of the GST-inclusive price of the accommodation) from the 28th day of the stay, or

treat all of these supplies as input taxed in the same way as residential rent*.

For information on how GST affects caravan parks and camping grounds, including how to calculate whether or not you provide long-term accommodation, see Goods and Services Tax Bulletin External Link - Accommodation in caravan parks and camping grounds.

Accommodation included in the definition of 'a caravan park or a camping ground'

Section 195-1 of the GST Act provides that 'commercial residential premises' means 'a caravan park or a camping ground or anything similar to residential premises described' as a caravan park or a camping ground. The rental of a caravan, demountable home, permanent cabin or villa on site and the rental of a site for a caravan or a demountable home is included in this definition even though most individuals who rent sites pay for all associated expenses (for example, electricity, gas) (GSTR 2012/6 paragraphs 109, 110, 212 to 214).

Mixed supplies of long-term and short-term accommodation

Caravan Park operators who supply both short-term and long-term accommodation in the same premises, and who choose to treat supplies of long-term accommodation as input taxed, can apply a simplified method to calculate input tax credits. This method is outlined in the GST Bulletin External Link – Simplified calculation of input tax for caravan park operators.

This simplified method involves the use of a factor to calculate input tax credits on operating expenses. The factor, which is set at 1.75%, has been determined by the ATO in consultation with the industry based on a broad analysis of the expenditure and income patterns in a number of caravan parks. The use of this factor enables you to easily work out the proportion of GST paid on your acquisitions that relate to making input taxed supplies of long-term accommodation. The factor will be regularly reviewed in consultation with industry representatives to keep abreast of industry costs.

* Please note that if you choose to apply the input taxed treatment, you will need to apply the same treatment to all your supplies of long-term accommodation for at least 12 months after the date on which you first made the choice.

References

For information on how GST affects caravan parks and camping grounds, including how to calculate whether or not you provide long-term accommodation, see Goods and Services Tax Bulletin External Link - Accommodation in caravan parks and camping grounds.

For a discussion of the meaning of commercial residential premises see GSTR 2012/6

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